French media conglomerate Canal+ has secured approval from South Africa’s Competition Tribunal to acquire MultiChoice Group, the parent company of pay TV services DSTV and GOTV.
The $3 billion deal is subject to agreed conditions, the regulator stated on Wednesday.
The transaction could speed up a consolidation process that might position the pay TV provider as a formidable competitor to global streaming powerhouses such as Netflix, and will enable Canal+ to gain more inroads into Africa.
““The approval by South Africa’s Competition Tribunal marks the final stage in the South African competition process and clears the way for us to conclude the transaction in line with our previously communicated timeline,” said Maxime Saada, the CEO of CANAL+, in a statement.
“The combined group will benefit from enhanced scale, greater exposure to high-growth markets and the ability to deliver meaningful synergies,” he added.
Canal+ separated from Vivendi, its parent company, last December. It tabled an offer of 125 rand in cash for every MultiChoice share not owned by it last year, putting the valuation of MultiChoice at roughly 55 billion rand.
Among the agreed conditions is a package of guaranteed public interest commitments proposed by the parties. It supports the involvement of firms controlled by Historically Disadvantaged Persons and Small, Micro and Medium Enterprises in the audio-visual industry in South Africa.
Canal+ noted that the package will maintain funding for local South African general entertainment and sports content, affording domestic content creators a robust foundation for future success.
The commission said the combined worth of all the public interest commitments by merger parties was expected to reach nearly 26 billion rand in the next three years.
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“This package will maintain funding for local South African general entertainment and sports content, providing local content creators with a strong foundation for future success,” the companies said.
MultiChoice Group plans to spin off its local unit, the holder of its broadcasting permit, into a separate, autonomous entity that will be majority-owned and controlled by Historically Disadvantaged Persons. The move is important as it will enable the company to overcome rules that forbid foreign entities from holding above 20% of a South African broadcasting licensee.
